Incentives and metrics

“you have to be very careful of what you incent people to do, because various incentive structures create all sorts of consequences that you can’t anticipate”

Steve Jobs

Observation 1: As more companies are enforcing a work from home (WFH) policy these days, a new trend is starting to emerge. I’ve already observed at least 3 companies that started adding a “work from home” payroll addition to their employees, and with even more amusement I’ve heard employees gloat about it.

Observation 2: People and managers tell me how they are happy to see productivity not only remain stable, but improve. People are finding their “zone” much more easily without the distraction of office environment, less wasted time on water cooler chats, less time spent on lunch breaks, and of course huge amounts of time saved on commute.

I think that it’s only a matter of time until people start connecting the dots.

I’ll start with the first (quite miserable) realization: if you work for a company that boasts fancy office perks, you are underpaid, and are incentivized to spend more time in the office. The latter is pretty obvious, and I’m sure you realized that when you signed up. The second usually takes a while to sink in. Look around the office, and count the money. All the people there catering for your needs, all the food, dry cleaning, cooks, massage therapists, and whatever other ostentatious pers you see, cost a lot of money. And all this money – is taken out of your pocket.
I had the luxury of having an opportunity to decide between two jobs – one with Amazon, and another with a large company that offered said perks, and quickly realized how the amazon frugality translates into more employee satisfaction and more take-home pay. Simple – as an Amazonian, your perks end up with a $100 discount on shopping at amazon.com. Per year (manifested as a 10% discount on the first $1000 spent). And for the same role you are getting significantly more in your total compensation than with the other “fancy perks” company.

Question 1: Is this a time where both employees as well as companies realize that it’s time to start treating their employees like adults (you need a massage mid-day – great, you are paid like an adult, so go ahead a book one). This realization will have some significant effects on the workforce – less human capital needed to maintain the office environment (all those service jobs basically gone), but with the obvious other side of the coin – an opportunity for small businesses to offer the same services, for actual cost (not subsidized) as all those employees that are now paid more can consume these based on actual need.
It’s also the greener less wasteful path – again, we’re switching to a model where consumption is actual and not pre-planned based on number of employees.

Question 2: Setting aside the office environment side, and realization that companies need to pay more to employees who counted on getting fed and their ass wiped at the office (maybe that’s why people are buying stupid amounts of toilet paper),the productivity boost is hard to ignore. There are already entire companies working fully remote, my question is how many of the ones that have not embraced work from home (even on a partial basis) will realize this is something they need to start planning for and embracing, rather than trying to force butts-in-seats-at-the-office for some 80’s era productivity book?

So to get back to Steve Jobs’ quote from earlier – pretty clear how creating the wrong incentives have driven a culture that’s less productive, brings less value to both the companies as well as to employees, all in the name of “competitiveness”. Time to check what problems you are trying to solve again, and act a bit more like the engineers and scientists we are…

Full disclosure – I’ve been a proud Amazonian and still support many of the work culture elements from there. I’ve also been working remote for over a decade, both as an IC as well as managing remote teams globally (pretty successfully as well).

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.